Steve Gill, Board Advisor the firm planning a plasma gasification waste to energy plant for the Bahamas, Stellar Energy, has responnded to recent criticism of the plans by the Waste Resources Development Group (WRDG).

Stellar Energy remains committed to the provision of a world class waste management, remediation and clean energy production facility for the Bahamas. Stellar has worked tirelessly for over 6 years at its cost in advancing the project.

It is with disappointment that we are seen as an easy target by some local entities with a vested interest in the current practice, which has resulted in an unmanaged toxic waste dump that continues to have a significant, negative effect on this beautiful island; notably hazardous leachate that breaches the water table and noxious fires, both underground and open air.

The need to ameliorate this situation is plain to see, with the added benefit of a continuous supply of clean, renewable energy at less than half the current cost to Bahamian inhabitants. WRDG (which consists of consortia of small waste handlers and processors) is quick to point out their concerns over one of the proposed technologies-Gasplasma®.

When processing over 1000tpd of highly organic waste the only proven technology with long run time history is mass burn incineration, one can only imagine the furore that would have occurred if this solution had been proposed by Stellar for this project, as well as public outcry. Stellar looked for a new technology with significant risk mitigation, via the combination of two proven (at scale) technologies; gasification and DC Plasma Arc.

Our chosen technology provider, Advanced Plasma Power’s CEO Rolf Stein, supports rebuttal of these allegations made by the projects detractors. He said ‘The Gasplasma technology is based on two long proven technologies (fluidised bed gasification and plasma furnace) deployed in multiple locations around the world.

The Gasplasma technology brings benefits of efficiency and environmental improvement in the generation of power, the reduction in hazardous waste and lower water consumption compared to other waste to energy solutions. Confidence in the technology has been demonstrated by the recent investment by National Grid (UK) in a Gasplasma based project in the UK which is under construction.

Our work with Stellar and the EPC partner to date indicates that the proposed solution will not only deliver renewable power but provide a controlled and substantially more environmentally improved situation than the status quo’

To further mitigate any residual risk Stellar had ensured the whole project was underwritten with a comprehensive process guarantee by one of the world’s eminent and most experienced EPC contractors.

WRDG voice concerns about the proposed cost; again we feel the need to bring balance here. The $650mio figure was a first estimate that was subject to review following 3 separate FEL studies; waste characterisation, landfill study and resultant plant configuration.

Stellar undertook the first of these studies at its own cost, the results of which already bought the indicative capex down some $200 mio to $450mio. Stellar remains very confident that the last two studies would bring the cost down even further to meet its aim of sub $350mio. The irony here is that all costs of this project were to be borne by Stellar, not the Bahamas government or any allied body, public or private.

Again unfounded allegation of significant tipping fee increases are without foundation as Stellar’s business model is based on current pricing. The project bankability is underpinned by a PPA, like all energy projects of this kind in order to make the project fundable. The proposed PPA would have seen prices for clean, continual power brought down by more than 50%, so where we ask is the downside?

As a further commitment to the island and the legacy this project would bring is that Stellar had committed at its cost, to provide a “Centre of Excellence” whereby local labour would have been trained to world class standards and independently certified with NEBOSH/IOSH qualifications to allow maximum local labour content in the construction and operational phases.

To date we have seen no such offering in any shape of form from any of these detractors, in particular WRDG or their intent to work together for the common good.

The European Commission released on 26 January the Communication on the Role of Waste-to-Energy in a Circular Economy. Although non-binding, the communication analyses the current role of waste-to-energy and gives guidance on Member States on how to cope with the problems this generates.

From Zero Waste Europe’s point of view, the Commission has positively changed its position from promoting incineration to acknowledging the problems related to overcapacities, distortive economic incentives and the risk that a very quick phasing out of landfills shifts waste from these to incinerators and not to prevention, reuse and recycling.

In this regard, the Commission advises those Member States heavily relying on landfills to focus on separate collection, on increasing recycling capacity and on diverting bio-waste from landfills. It insists that in case these Member States want to obtain energy from waste, they are recommended to recycle bio-waste through anaerobic digestion. In addition, they are called on taking into account the commitments and objectives for next 20-30 years (separate collection and recycling targets) and carefully assess the evolution expected for mixed waste when planning infrastructures, so as to avoid regrettable investments (i.e. redundant incinerators).

When it comes to those Member States heavily relying on incineration, the Commission calls on them to raise taxes on waste-to-energy, phase out public support schemes, decommission old facilities and establish a moratorium on new ones. The case on defunding waste-to-energy has been extended to all Member States, so as not to distort the waste hierarchy. In this sense, the Commission acknowledges that the waste operations delivering the highest reduction of GHG emissions are prevention, reuse and recycling and are the ones to be promoted, something Eunomia’s report for Zero Waste Europe of 2015 already showed.

Zero Waste Europe welcomes this call, but would have expected the Commission to show this ambition when last November proposed a revision of the Renewable Energy Directive that is the one opening the door for renewable energy subsidies for incineration. ZWE expects MEPs and national governments to take note of this communication when reviewing the Directive and bring coherence between EU legislation.

ZWE notes, however, that the text still considers that waste incineration has a role within a circular economy, which is a conceptual contradiction because if material loops are effectively closed there is nothing left to burn. A more accurate approach would be to say that the capacity of waste to energy incineration is to be used in the transition period to a circular economy but once proper material and value preservation policies are successfully implemented burning waste will be redundant.

Finally ZWE’s warns about the Commission current double standards with its approach to waste to energy (WtE) in Europe and its support to WtE in the rest of the world, particularly in the Global South where we have seen successful recycling programs having been dismantled to feed the European funded incineration plants.

Nevertheless, this communication seems a change in the mindset of the European Commission and a positive step to phase out environmentally harmful subsidies and move towards zero waste.

The European Commission has urged member states to gradually phase out public funding for energy recovery from mixed waste in new non-binding guidelines on waste-to-energy.

Mixed waste used as feedstock in waste-to-energy processes is expected to fall due to higher recycling targets, currently being discussed by the EU institutions, as well as separate collection obligations, the document says. This type of waste accounts for just over half of all waste converted into energy in the EU.

The Commission notes that experience in some member states has indicated a real risk of stranded assets, particularly in incineration. Member states with little incineration capacity and high reliance on landfilling should prioritise new recycling capacity and develop anaerobic digestion to treat biodegradable waste, it says.

Countries with high incineration capacity should ban new facilities while decommissioning old, less efficient ones, the document states. They are also advised to introduce higher incineration taxes for inefficient processes and phase out support schemes.

Presenting the guidelines on Thursday, Commission vice president Frans Timmermans said that creating a market for incineration should be avoided “as much as possible”. “It’s unavoidable for a small part, but only at a stage where recycling is no longer possible – and certainly should not be done before that,” he argued.

The document stresses the importance of the priority order set in the waste hierarchy in ensuring that waste-to-energy capacity does not generate stranded assets.

The Commission seeks to clarify how the hierarchy applies to various waste-to-energy processes, noting that they rank differently in terms of their sustainability.

Anaerobic digestion counts as recycling in the waste hierarchy, which is half-way up the ranking just behind prevention and preparing for reuse, according to the guidelines. Just below, they place waste incineration and co-incineration operators with a high level of energy recovery under ‘other recovery’, together with reprocessed waste used as fuel.

Only waste incineration and co-incineration with limited energy recovery are classed as disposal, the bottom category of the hierarchy, along with gas from landfills. Incineration, co-incineration in kilns and anaerobic digestion provide around 1.5% of the EU’s total final energy consumption.

However, the guidance leaves member states the opportunity to depart from the priority order if they can justify why this achieves “the best environmental outcome”. Potential reasons outlined include technical feasibility, economic viability and environmental protection.

Green group Zero Waste Europe said the recommendations provide clarity on how to implement the waste hierarchy. But it regretted that the Commission had not included its call to phase out subsidies for waste-to-energy in its proposal for a revised Renewable Energy Directive from last November, calling on MEPs and member states to do so during the legislative process.

Large numbers of energy from waste (EfW) plants exist right across Europe and many of the UK’s municipal solid waste (MSW) and mixed recyclables ‘processing’ facilities are simply exporting a high proportion of mixed material refuse derived fuel (RDF) bales to utilise spare European capacity.

Globally, further waste to energy plants are being planned and built, while landfill is frowned upon as the accepted ‘worst option’ for disposal. Revisiting the decision-making metrics that have led to this ‘accepted waste hierarchy’ might point to a stark choice between the two waste disposal options.

There are valid arguments for the ‘pros’ and ‘cons’ of both waste disposal methods. But what if the true environmental cost of CO2 emissions was also factored into deciding the ‘best option’?

When the full carbon-cost of the disposal method is expressed in ‘pound notes’ – reflecting the impact that large-scale CO2 release has upon the Earth – then this metric could really change decisions about what is ‘good’ waste material to burn as a fuel and what is ‘bad’.

Energy Generation
The non-homogeneous nature of the waste fuels requires robust moving-grate burners to move the combustible materials through the unit. Water-filled side boilers must be used for heat transfer to capture the heat-energy produced.

Even the most modern burner designs are relatively inefficient at energy recovery, generating lower amounts of electrical power per tonne of fuel burned when compared to high-efficiency, combined cycle gas turbine systems (CCGT).

Both power generating units are ultimately doing the same task: converting carbon-rich fuels into electricity (and ideally combined with heat production), while sending atmospheric-polluting carbon emissions up the exhaust stack as a major environmental cost associated with the beneficial electrical power supplied into the local grid.

So what are the solutions? High-efficiency gas turbines are a much more efficient way to generate each kilowatt of power, plus some heat, from fossil fuel sources if measured in terms of the mass of CO2 released per unit of power output.

Waste Fuelled
However, large scale waste-burners consume huge tonnages of waste materials that would otherwise have been landfilled. Siting an EfW plant close to large urban areas can also deliver useful heating into local industry and households.

If the major components in the infeed waste fuel mix to a modern EfW unit are renewable carbon, such as wood, papers, cardboard or organic matters, then the ‘short-life’ carbon atoms released back into the atmosphere via the exhaust stack are ecologically balanced with their earlier carbon-capture in a tree, plant or living organism. So this fraction of the waste ‘fuel’ shows a carbon-neutral effect.

As for the plastic content in residual household or commercial waste, the carbon-rich molecules that create the long-chain polymers (e.g. ethane, propane, styrene, etc.) are derived from crude oil refineries and are then polymerised to make plastics.

Burning these is essentially the same as driving a petrol car or taking a flight – power created at the ‘expense’ of long-life carbon release.

But what if the waste plastic could be separated from the ‘organic or renewable carbon’ wastes and the ‘inert’ carbon-rich, stabilised plastic stored either in the ground or in a covered storage system?

That would represent a long-term carbon-sink and remove those fossil-based materials from the EfW infeed mix. Clearly it would be better to recycle these materials if a technically and economically viable process was available to do that.

The Carbon Balance
Using a CO2 metric alone suggests that it makes more sense to bury large amounts of plastic in a long-term ‘carbon sink’ in the ground and efficiently combust natural gas to satisfy our immediate power needs.

However, until world leaders are prepared to transform the taxation on fossil fuel use in a way that truly reflects the high cost of ‘free carbon release’, then this numeric analysis remains an esoteric academic study.

The Paris Agreement commits countries to taking action to hold temperature rises to well below 2C above pre-industrial levels – and to try to stabilise emissions at a level which would see a temperature rise of no more than 1.5C.

Following the agreement’s signing by the largest CO2 producers and as the COP22 meeting in Marrakesh draws to a close, some world-leading countries may start to introduce the taxation of fossil-fuel carbon release as a means to get the world’s atmosphere back under control and remain within the stated, and agreed, 1.5C global warming limit.

However the major contributors to global carbon emissions, USA and China, appear to remain heavily dependent upon coal-fired power plants and oil-based fuel systems in their economic activity.

Bigger Picture
Eminent scientists worldwide have calculated that a very large proportion of the known (and often privately-owned) reserves of oil, gas and coal already available for extraction and combustion will have to stay in the ground as part of tackling climate change and staying within agreed limits.

The huge shift in corporate and national energy-habits required to leave fossil fuels in the ground will only happen with a Carbon Tax; particularly on the creation of electrical power and directly linked to the tonnes of CO2 released into the atmosphere per unit of fossil carbon consumed.

If that happens, it might be the time to return to that ‘mine’ of carefully stowed thousands of tonnes of good plastic and look at the economics of turning it into new polymer.

With a huge carbon tax slapped on burning it, then the economics would probably work. So these plastics may not have to stay in the ground for too long.

Looking at the bigger picture, we should all be concerned about the wholesale damage of completely uncontrolled burning of fossil fuel. That’s what we’re doing when we’re burning plastic that’s encapsulated amongst the mixed MSW we put in our black bin bags.

Time for a ‘Sky-fill’ Tax?
The short-term political and economic viewpoint is that ‘we’re getting some electrical power from it so it must be a good thing to do’. But this I think reflects the market failure created by very high landfill taxes that are not balanced by an equivalent taxation method to discourage ‘sky-fill’.

It’s a complex and challenging issue that reaches out over the next 20 years; a critical period in our history.

Until we get a carbon tax that puts some seriously big costs on throwing carbon into the atmosphere, I don’t see there being any real change. After all, the Earth doesn’t have a bank account – it’s us humans who operate under that monetary metric.

When complete, the plant will provide a long-term waste management solution for the 5600 tonnes of the region’s waste per day while generating an estimated 168 MW energy.

It is claimed that this will make it the largest waste to energy plant in the world, although other plants built in multiple phases may have more processing capacity.

B&W Vølund will supply equipment, including a DynaGrate®combustion grate system, hydraulics, burners and other boiler components for the 168 megawatt plant. It will also provide construction advisors for the combined heat and power project.

“The demand for reliable and clean renewable energy is growing in China and throughout much of Asia,” said Paul Scavuzzo, senior vice president, B&W Renewable.

The circular Shenzhen plant will be built with sustainability in mind and will incorporate rooftop solar panels, a visitor education center and an observation platform into its architectural design. It also represents the first time B&W Vølund has deployed its DynaGrate® technology in China.

Singapore’s National Environment Agency (NEA) has joined forces in a Collaboration Agreement with the Nanyang Technological University, Singapore (NTU Singapore) to develop a S$40 million ($30 million) waste to energy research facility.

According to the NEA the facility will be the first of its kind in Singapore and is planned to enable the translation of emerging waste to energy technologies, such as the use of syngas in demonstration and test-bedding projects.

Possible projects to be conducted at the facility include turning waste and biomass into synthetic gas, cleaning and upgrading syngas to run an gas engine or turbine for higher energy recovery efficiencies, the utilisation of slag in engineering applications, novel flue gas treatment module for lower emissions, low-grade heat recovery and using a gas separation membrane to extract oxygen from air.

History of Collaboration
The collaboration agreement was signed by Ronnie Tay, CEO of NEA, and Professor Ng Wun Jern, executive director of NTU’s Nanyang Environment & Water Research Institute (NEWRI).

“NTU has an established track record of industry collaboration and for translating research into impactful commercial applications,” commented Prof Freddy Boey.

“It will provide local institutions and industries access to the world-class research facilities and expertise at NTU, helping them to innovate and develop clean solutions that are globally competitive,” the professor continued.

Expected to be commissioned by late 2018, it is hoped that the facility will be an open platform to support research and its translation, as well as personnel training to build technical competencies in waste to energy.

Ronnie Tay added: “We hope that this facility will provide stakeholders such as research institutes, academia and industry with a platform to collaborate in and create more effective and sustainable waste management solutions through research, development, demonstration and test-bedding.”

Hong Kong’s Secretary for the Environment, Wong Kam-sing, spoke with pride at the official opening of the HK$5.5 billion state of the art Sludge Treatment Facilities (STF) last week. The facilities are to be renamed in less malodorous terms as the T Park with the T standing for transformation. “It signifies Hong Kong’s dedication to ‘transforming’ waste into energy, which is a key part in the waste management strategy for Hong Kong,” Wong said at the opening ceremony at which Chief Executive CY Leung officiated.

But one aspect of this world class project Wong did not elaborate on is that Veolia, the main contractor, that built the STF, has started legal proceedings against the Hong Kong government to recover HK$2 billion in cost overruns associated with the project. Mediation proceedings are expected to start soon.

The STF which is located at Tsang Tsui near Tuen Mun, was built by a joint venture in which Veolia had 60% and Leighton 40% under the auspices of a 15-year design build and operate contract. It has been quietly operating since April 2015, and is currently incinerating 1,200 tonnes of sludge per day that would otherwise be sent to landfills.

The sludge is delivered by trucks from Stonecutters Island Sewage Treatment Works and ten other wastewater treatment facilities. This is a considerable improvement over the situation 25-30 years ago when most of Hong Kong’s raw sewage went straight into the sea. The STF has a maximum capacity of 2,000 tonnes making it the largest facility of its kind in the world.

Hong Kong’s efforts in this area are gaining international recognition. In April this year, the STF together with Stage 2A of the Harbour Area Treatment Scheme, won a Distinction award in the category of Wastewater Project of the Year at the 2016 Global Water Awards. In addition, the architectural design of the STF was acknowledged by the Hong Kong Institution of Engineers and the Institution of Structural Engineers with the presentation of the Grand Award in this year’s Structural Excellence Award.

The EPD is naturally pleased to have one of the key elements of its waste infrastructure in place. However, the joint venture that built the STF is believed to be less than happy at the way events have turned out.

T-Park. Photo: GovHK.

The project was more than a year late. According to people familiar with the STF, this was in large part due to delays by the EPD and other government departments in providing the permits and consents that were necessary to proceed with the project. As a result, the contractor incurred higher charges and significant costs in implementing work-around measures.

Immigration Department

One difficulty the contractor faced was that it had anticipated building a barging point at the site since both the nearby Pillar Point power plant and WENT landfill have permanent barging points. But its application to the Lands Department was not successful. This meant that, instead of delivering large sections of the incinerator to the site on barges, the incinerator had to be taken apart and delivered to the site in smaller pieces by trucks.

T-Park. Photo: GovHK.

This created additional welding work which could have been manageable but the contractor then suffered a further setback at the hands of the Immigration Department which refused to grant visas for foreign specialist welders. They were necessary as boilers operate under high pressure and therefore require very specific welding qualifications that are not available in Hong Kong. Even though this was pointed out to the Immigration Department, the visas were refused. The contractor therefore had to train local welders to overcome this issue. Even then very few passed the required test leading to significant delays in the installation of the boiler.

Fire Services Department

There were also problems with the Fire Services Department (FSD) in getting a Dangerous Goods License and Fire Services Certificate. The FSD was not familiar with the STF’s incinerator since there are no others like it in Hong Kong. Veolia therefore had to train FSD officers to enable them to better understand the plant and what the fire risks are. The contractor had to organise a trip to Europe to visit incineration plants with FSD officers and again a year later as the FSD officers had changed. This also generated significant delays.

Surplus power

One of the key features of the STF touted by the EPD is that it is a waste to energy plant. Indeed, waste-to-energy has become the central mantra of the EPD’s waste management strategy. However, the Environmental Impact Assessment for the project that was completed in 2008 notes: “As the surplus power is anticipated to be minimal and it would be unlikely for CLP to purchase the surplus power, the surplus power would not be sold. Therefore, no power transmission line will be constructed outside the STF site.”

While it was always envisaged that the plant would generate its own electricity, the idea of exporting it appears to have been an afterthought and to have first surfaced in the tender documents. But it is clear that there is no economic incentive for this move given the small amount involved – a maximum of 2MW per day when the plant is operating at maximum capacity possibly in ten years’ time. It is a political initiative to try and broaden the appeal of the EPD’s environmental strategy.

The EPD appears to have left it to the contractor to discuss this issue with a reluctant CLP. This is why the need for an export transmission line only became evident relatively late in the day. As a result, people say it took a long time for CLP to produce the final requirements as to where the connections should be located resulting in long delays before the design of the electrical plant could be finalised.

The EPD’s response to the claim appears to have been to do literally nothing and to pretend it didn’t exist. Faced with this inaction the contractor initiated mediation proceedings as stipulated in its contract.

‘Standard ploys’

But Veolia is not alone in encountering delayed payments by the Hong Kong government which has a number of standard ploys for dealing with claims. One approach is to attempt to bully contractors by pointing out that aggressive pursuit of a claim might hinder consideration for future government contracts. Another tactic is to delay payment for as long as possible in the hope this will encourage the contractor to settle for a lower amount.

Filibustering?

The problem has become so pervasive that 14 international chambers of commerce in Hong Kong sent a letter to Jasper Tsang, the president of the Legislative Council, last February outlining their concerns. The letter pointed out that the delays in payment to contractors was jeopardising the health of consultants and contractors and the whole construction supply chain and could lead to financial problems, the need for layoffs and job losses.

The letter was sent to Tsang in the belief that it was the filibustering and political posturing in Legco that was delaying the approval of funds to be paid to contractors.This is certainly one reason. Another is the chronic culture of risk aversion and self-preservation that pervades the civil service which discourages people from taking big decisions.

The management of the STF project and the handling of its claim is a prime example. The default position of ministers is to avoid taking decisions, and thus responsibility, which could result in criticism, public humiliation and possibly harm their pensions. This aversion to risk is immediately picked up by their civil servants who know they cannot rely on support from their seniors. So for the same reasons they too will avoid involvement with ‘risky’ projects and taking responsibility for decisions.

Government departments can just about bring themselves to ask Legco for additional funds so long as they can justify it in terms of increasing costs of materials and labour. But this approach is unlikely to be successful with Veolia’s claim since it involves additional funding amounting to some 40% of the original price of the project. That will take some explaining. The EPD appears to have taken the view that if the mediation process is able to achieve a settlement, this will make it easier to approach Legco for funds.

The EPD is still smarting from the mauling it received at the hands of the Public Accounts Committee in December 2015 when it was accused of deliberately misleading Legco over the remaining life of Hong Kong’s landfills. It denied the accusation but the experience has increased the EPD’s reluctance to return to Legco since it is aware its reputation has been undermined and that it will be subjected to close scrutiny.

None of this bodes well for an early resolution of the STF claim or indeed other infrastructure related claims. Nor will it enhance Hong Kong’s reputation as place in which to invest and do business. The Hong Kong government has already acquired a reputation for being a slow payer. This will encourage contractors to further pad their tenders as they factor in government risk. This will ultimately increase the cost of Hong Kong’s infrastructure to the taxpayer.

It is unlikely this situation will improve in the near future since there is nothing to suggest that the political situation in Hong Kong will improve sufficiently to allow Legco to get on with its work in a less partisan manner. Further the civil service is unlikely to break out of the current culture which is paralysing government and exerting a dead hand over Hong Kong.